Atlanta’s Super Bowl dreams hinge on a $10 million tax break

When the Panthers and Broncos kick off on Sunday, more than 70,000 people will pack inside Levi’s Stadium in Santa Clara, California, for Super Bowl 50. Ticket-buyers will have paid anywhere from $850 to $3,000 for face-value tickets—likely more if they got them second-hand. Though the price of admission is steep, attendees at least get a small discount: Tickets are tax-free.

Since the ’90s, the National Football League requires Super Bowl cities to meet certain requirements, starting with a large stadium, plenty of local hotel rooms, and abundant transportation options. As part of that checklist, local officials must forgo all sales tax on Super Bowl tickets—either through a special waiver or a subsequent reimbursement. (Not that the NFL, which turned a $12 billion profit last year, arguably needs the money.) League execs claim the tax exemption is necessary to “benefit the attendees who would otherwise have to incur it.”

Atlanta could be next in line to incur that cost. After the city was named a Super Bowl finalist last May, the Metro Atlanta Chamber is now putting together a bid package to host the game in 2019 or 2020. The proposal, which is due in April, includes a waiver projected to cost taxpayers $10 million. Once bids are submitted, NFL owners will weigh the applications before deciding the winners sometime in May.

Dan Corso, executive director of the Chamber’s Atlanta Sports Council, the committee that bids on major sporting events, sees the waiver as a small price to pay for the benefits that come with hosting the nation’s largest sporting event. Indeed, the three other finalists that Atlanta faces—Tampa Bay, Miami, and New Orleans—have hosted a combined 24 Super Bowls, some of which were won due to their embrace of the tax exemption. He says the waiver keeps Atlanta on a “level playing field with those cities.”

“It’s required to stay competitive,” Corso said.

He also considers the waiver a “win-win” for Atlanta. If the city ends up hosting a Super Bowl, the Chamber projects it would pump $400 million into the local economy. That infusion of cash would in return generate $30 million in city and state sales tax revenue—surpassing the initial cost of the exemption by a three-to-one difference. And, if Atlanta loses the bid, the waiver wouldn’t be used. No harm, no foul.

Before turning in its bid, the city and state must each agree to waive sales tax for the tickets. Considering Mayor Kasim Reed’s strong support of the new Mercedes-Benz stadium, the Chamber shouldn’t have much trouble gaining the city’s approval. In backing the bid, the mayor said the economic impact of a Super Bowl would benefit both the hotel and convention industries and their employees.

“What a Super Bowl does isn’t something just for fat cats and rich people,” Reed told us. “You’re in hotels—you see the cooks, the waitresses, the doormen…There are people who get up and go to work everyday at all of the hotels.”

While Gov. Nathan Deal supports the tax break, the proposal has its critics at the Capitol. State Sen. Vincent Fort, an Atlanta Democrat, believes the Falcons have gotten far too much public money—more than $200 million on Mercedes-Benz Stadium itself, hundreds of millions for surrounding infrastructure, $30 million for a parking deck, and $8 million for a pedestrian bridge—without benefitting the public enough through new jobs with fair wages.

“And now they want tax credits for Super Bowl tickets?” he asked. “Do Arthur Blank, the Falcons, and the NFL have no shame?”

There’s also a larger fight over the necessity of tax breaks. State Sen. Josh McKoon, a Columbus Republican, doesn’t like that such exemptions “pick winners and losers with the tax code.” When the stadium received public money from the hotel-and-motel tax, residents were told the tax dollars would be enough to win a Super Bowl. Yet the cost for taxpayers has continued to rise, McKoon said.

“Look, I’d love for the Super Bowl to come to Georgia,” he said. “But I fundamentally reject the idea that the NFL requires you to give up sales tax revenue. They can only require it if there’s a host city willing to make that deal. The only reason the NFL gets away with mugging communities bidding for this is that the communities allow it to happen. It becomes a bad deal for taxpayers.”

McKoon points to places like New Jersey, where some local officials admitted buyer’s remorse after forgoing $7.5 million in sales tax collections in order to host Super Bowl 48 in East Rutherford. (Rather than preemptively waive taxes, the state later wrote the NFL a check). Following the 2014 match, New Jersey Senate Majority Leader Loretta Weinberg called for all states to boycott the sales tax requirement. “It appears host states have been taken to the cleaners on this one for years,” she said in May 2014, “and I have no doubt the practice will continue unless we take a stand to end it.”

That stand won’t be happening in Atlanta. Shortly after this weekend’s Super Bowl, the Chamber’s ‎top lobbyist Marshall Guest expects a state lawmaker to introduce a bill to waive the state’s sales tax to meet the NFL’s requirement. As the Chamber and the mayor see it, there’s simply no other choice in Atlanta’s Super Bowl quest.

“We have a decision to make: either we want to win a Super Bowl or we don’t,” Reed said. “Atlanta should be competitive.”

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